Pulp Mills Case: A Commentary

Alan Boyle1

I want to discuss the decisions significance for international environmental

law and general international law. Not going to talk about merits of the case.
Obviously as counsel for Uruguay I am very pleased indeed with the outcome,
but my perspective today will simply be that of an academic with a
longstanding interest in this area of law.

1. Significance of case

Clearly the most important case on international environmental law

decided by any international court so far. Actually addresses the merits
and the substantive law. Not simply a case about a river treaty
Courts interpretation and application of the 1975 Statute of the River
Uruguay very much influenced by its perception of general international
law. Covers most of the issues dealt with by ILC in draft articles on
prevention of transboundary harm notification, co-operation, EIA,
prevention and due diligence and reflects the ILCs view of the law,
notwithstanding the lukewarm reception the ILCs draft articles on
transboundary harm have so far received from states, although not
from Uruguay or Argentina, which relied heavily on them.

Also an important case on international watercourses insofar as it deals

with relationship between equitable use, protection of the environment
and sustainable development. Once again its approach is fully in line
the ILCs work on this subject and with the 1997 UN Watercourses
Convention.

Worth noting the international economic law aspects Finland-

Uruguay BIT, MERCOSUR dimension of 2nd provisional measures
case, IFC review process and appeal to ombudsman. The merits
decision is of real importance to investors, to the states in which they
invest, and to funding bodies such as the World Bank.

Finally, yet another case about VC Article 31(3)(c) and interpretation by

reference to evolving international law. The court does indeed read
one contemporary concept into the treaty EIA and it accepts that
measures taken to protect the rivers flora, fauna and biodiversity must
reflect the parties international undertakings by virtue of the wording of
Article 41. But it rejects Argentinas argument that other treaties are
incorporated into the Statute or that various articles of the Statute serve
as referral clauses to other treaties. In this respect the court is
cautious but quite consistent with its earlier precedents. It is plainly

1
Professor of Public International Law, University of Edinburgh and barrister, Essex Court
Chambers. AEB 2010

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 reluctant to allow one treaty to serve as a jurisdictional basis for
litigation under other treaties. To that extent it rejects the idea of forum
shopping.

2. EIA

EIA probably the most significant issue dealt with by the court. Until
now, no international court has held unequivocally that EIA is obligatory
in cases of significant transboundary risk or considered what a
transboundary EIA requires.

Neither state is a party to the 1991 Espoo Convention on

Transboundary EIA, nor is there any reference to EIA in the 1975
Statute. Uruguayan law nevertheless required an EIA for a project of
this kind and one was duly carried out. Accepting the arguments of
both parties on this point, and in accordance with VC Art 31(3)(c), the
court found that the Statute should be interpreted in accordance with a
practice, which in recent years has gained so much acceptance among
states that it may now be taken as a requirement under general
international law to undertake an environmental impact assessment
where there is a risk that the proposed industrial activity may have a
significant adverse impact in a transboundary context. (para 204).

This treats EIA as a distinct and freestanding transboundary obligation

in international law reflecting Principle 17 of Rio, the Espoo
Convention, and Article 7 of the ILC draft articles on transboundary
harm. Nevertheless, the court also endorsed the alternative view that
EIA is a necessary element of the due diligence obligation. Either way,
the Court has now confirmed that in appropriate circumstances an EIA
must be carried out prior to the implementation of a project that is likely
to cause significant transboundary harm. (para. 205)

No surprise given the growing body of treaties that require a

transboundary EIA, as well as the instances of state practice. No state
faced with litigation will deny that there is an obligation in international
law to carry out an EIA: what they will do is deny that the
circumstances require one (no risk of transboundary harm) or argue
instead that an EIA was carried out. Uruguay chose the latter option.
Argentina responded by arguing that the EIA was inadequate: that
alternative sites should have been assessed. The Court noted that
neither the Espoo Convention nor the UNEP EIA guidelines required
assessment of alternative sites, but it went on to find that Uruguay had
in fact assessed other sites.

An important question remains: would the Court ever review the

adequacy of an EIA? It accepted Uruguays argument, based on the
ILC commentary, that the scope and content of an EIA are not
specified by general international law. It is thus for each party to
determine on a case by case basis what is required having regard to
the nature and magnitude of the proposed development and its likely

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 adverse impact. (para 205). This formulation and the finding on
alternative sites appears to leave open the possibility of reviewing the
adequacy of an EIA in appropriate cases, and it would not be
unreasonable to conclude that the Court did so here but found nothing
wrong with the EIA undertaken by Uruguay, apart from the failure to
make timely notification to Argentina as required by the Statute.

There is one human rights aspect to the case, although it was not
argued or decided in those terms public consultation. The Court
found that there had in fact been public consultation, but it nevertheless
went on to hold in categoric terms that no legal obligation to consult
the affected populations arises for the parties from the instruments
invoked by Argentina. (para 216). This goes beyond what Uruguay
had argued, and it seems right only if confined literally to the
instruments invoked by Argentina the Espoo Convention and the
UNEP Principles. Properly argued there should have been no difficulty
persuading the court of the general principle that public consultation is
a necessary element of the EIA process. For me this is the only
surprise in the entire judgment.

3. Prevention

The decision cites Corfu Channel and Nuclear Weapons and reaffirms
that A State is thus obliged to use all of the means at its disposal in
order to avoid activities which take place in its territory, or in any area
under its jurisdiction, causing significant damage to the environment of
another state (para 101). In this respect it again reflects the draft
articles of the ILC. This is not surprising: it fully accords with the
precedents and the leading textbook writers.

The court also confirms explicitly that the obligation is one of due
diligence: an obligation of conduct rather than one of result. It
specifically rejects Argentinas argument to the contrary. (para 187).
What does the exercise of due diligence entail?
- adoption of appropriate rules and measures (para 197)
- a certain level of vigilance in their enforcement
- the exercise of administrative control applicable to public and
private operators
- careful consideration of the technology to be used (para 223)
- EIA and notification

Again none of this is surprising, or new, or controversial. It conforms

closely to the precedents including Trail Smelter, and the ILC draft
articles.

4. Procedure

Court upholds Argentinas argument that Uruguay failed to notify CARU

and communicate EIA before authorising construction work. Parties
have a duty to cooperate in good faith. Procedural rules part of

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 principle of prevention and obligation of due diligence. Violation of the
Statutes express provisions on notification. Several judges give
separate opinions in effect dissenting on this finding, which could have
gone either way.

Court nevertheless rejects Argentinas argument that construction of

the plant is therefore illegal and that it should be pulled down. No
obligation under Statute not to build once consultation period has
passed. Finding of breach of procedure deemed sufficient satisfaction:
no cause to order cessation of the mill.

Court essentially following ILC view in Watercourses Convention and

draft Articles on Prevention. Breach of procedure does not make what
follows illegal. Is this right? Depends on circumstances. Analogous to
distinction between mandatory and directory requirements in public law
can be forced to comply, but failure to do so doesnt necessarily
invalidate all that follows.

Any other conclusion would allow one side to block all development
pending agreement or judicial resolution of the dispute. Could take
years. Pragmatic outcome.

5. Equitable use and sustainable development

The Court recognises that each party is entitled to make equitable and
reasonable use of the shared river for economic and commercial
activities in accordance with Articles 1 and 27 of the Statute. This is
fully in keeping with long accepted law on shared watercourses.

More importantly, the Court locates the right of equitable use within the
larger framework of sustainable development. It notes that Article 27
embodies [the] interconnectedness between equitable and reasonable
utilization of a shared resource and the balance between economic
development and environmental protection that is the essence of
sustainable development. (177). It stresses the obligation of each
party to protect the river environment and its flora and fauna, and to
take the necessary measures required by the treaty.

This formulation reflects the UN Watercourses Convention and the

more modern river treaties. As in Gabcickovo the court has made an
important contribution to modernising the law of international
watercourses in accordance with the UN Convention a treaty that has
few parties and is not in force but which has very quickly come to
represent contemporary customary law on the subject.

6. Evidence and scientific expertise

Most controversial aspect of the case should court have appointed

experts to advise on the scientific evidence (Simma & Al Khasawneh

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 dissent) or is court quite competent to decide on the adequacy of the
evidence. Both views tenable.

Who could possibly disagree that court-appointed experts would be

preferable method of fact-finding than allowing parties own experts to
convey their views as counsel, not subject to cross-X? If courts
criticism of parties for following that precedent reflects a change of
practice then this is welcome and sensible.

Problem here not the credibility of the parties experts as such. In fact
Argentinas did a good job on paper largely vindicating Uruguay. Real
problem for Argentina was proving its case not nearly strong enough,
and Uruguays was very strong. Tend to agree with Keith and
Greenwood that the decision was straightforward and unnecessary for
court to appoint experts. Seems unlikely that appointing experts would
have altered the outcome.

7. Conclusions

An excellent judgment that comes to sensible conclusions on all the

important legal issues and the will no doubt stand as the most
significant precedent in international environmental law since Trail
Smelter.
Shows that the court can handle scientific evidence competently and
fairly. No basis for criticising its ability to deal with environmental cases,
but it may be a challenge for court to move to a system where parties
own experts are subject to cross-examination.
No doubt there are in theory better ways of handling a dispute of this
kind, but that ignores the particular political context and the problematic
relations between a very large and significant country and a very small
and insignificant one trying to restore its economy and defend its most
important foreign investment while maintaining the integrity of its
environmental record. Court has handled the politics very skilfully
both sides can be and are well pleased.